Saturday, April 15, 2006

John Armstrong: Labour returns to form after lapses

Pressure? What pressure? Housing Minister Chris Carter was a busy man on Monday afternoon - busy brushing off suggestions he heavied the board of Housing New Zealand into agreeing the Auditor-General should conduct the inquiry into the state corporation's accounting practices.

The board began the day insisting it was okay for its own auditors, Ernst & Young, to take another look at its books following a whistleblower's allegations of shonky behaviour.

It ended the day persuaded otherwise, having been taught a quick lesson in political reality.

Had Ernst & Young done the job and found nothing wrong, the Opposition would have cried "whitewash" and pinged Labour for not calling in the Auditor-General in the first place.

While publicly supportive of the corporation's board, the Prime Minister privately made it clear she wanted matters sorted before her weekly press conference on Monday afternoon.

The board found itself on the receiving end of some straight talking from Carter and the chief executive of the Department of Building and Housing, Katrina Bach.

Having got what was required, Carter judiciously spared the corporation further blushes by insisting it had U-turned of its own accord.

Putting the detail of the allegations to one side, the Government's management of the crisis was a return to form after the stumbles of recent months.

Labour kept the whole messy business at arm's length. It shut down Opposition lines of attack by agreeing the corporation's attempt to gag the aggrieved contractor-turned-whistleblower was foolish and wrong. It made sure the consequent inquiry is seen as truly independent.

However, while Labour was frantically turning on the fire extinguishers, the story did not catch fire with the public.

That has been par for the course. Labour has been bedevilled by problems of its making or embarrassed by ones emanating from the state sector. National once again found itself trying to make mileage out of yet another "scandal" which failed to excite voters.

Now, with the Government about to reach the six-month mark - it passes that milestone on Easter Monday - Labour is optimistic that it may also be turning the corner.

It has survived a bruising couple of months where National has thrown everything it could find at it in Parliament.

Senior Labour MPs believe that National will now have to rethink its strategy. While National is landing hits on Labour, they are having no lasting impact on Labour's popularity or the Government's stability.

This week's Herald-DigiPoll showed the Government is still trusted by the majority of voters. That would suggest Labour has a margin for error as long as it gets the fundamentals of governing right.

However, Labour might be better to treat the favourable polls as a get-out-of-jail-free card.

Apart from the troubles of David Benson-Pope and the resignation of David Parker, the past six months have seen puzzling lapses from experienced ministers. The Government has looked listless at the very time the numbers in the House and Labour's constant struggle against outliving its welcome mean governing is much more difficult.

Labour has taken an awfully long time to adjust to the fact it no longer dominates Parliament.

It has been slow to roll out a fresh policy agenda to avoid being typecast as a tired, third-term government.

These problems are in part down to the sweeping post-election Cabinet reshuffle. There is an acceptance in the Beehive that the switch in portfolios has seen some ministers take far longer to acclimatise to their new jobs than was expected.

In some portfolios, the Government suddenly seems far less surefooted.

That phase will pass. But the ministerial glitches have been accompanied by a more fraught relationship with the bureaucracy. There is frustration within Labour that some ministries seem incapable of generating fresh policy options or delivering results in line with the Government's expectations.

Things have not been helped by Labour's suspicion that some parts of the bureaucracy - such as the Treasury - did not get the election result they wanted.

On the parliamentary side, Labour has not only had to adjust to consulting with more parties, it has found itself ambushed in the House and in select committees.

How long the brave new world of parliamentary democracy where National's private member's bills become law and select committees launch inquiries at the drop of a hat actually lasts is a moot point.

Labour will not let this happen for much longer. It will likely barter policy trade-offs with its minor partners in exchange for them not embarrassing the Government.

On the policy front, Labour is now confronting the accusation it lacks fresh ideas by seeming to be very busy.

There have been a rush of announcements in the past two weeks ranging from the new Governor-General and the overhaul of tertiary funding to the tax treatment of overseas shareholdings.

Things will be cranked up again after the Easter hiatus with pre-Budget announcements leading to the delivery of the document itself on May 18.

The question is whether such bouts of activity indicate a solid programme - as the Prime Minister insists is the case - or are more a matter of keeping up appearances. Or a bit of both. The tertiary funding overhaul was bare bones stuff, whereas the tax treatment of investments was detailed policy.

Labour can be its own worst enemy when it comes to flagging its forward path. It assumes everyone knows what it is doing and then gets upset when critics accuse it of drifting.

Take the three new "government priorities" - economic transformation; families, young and old; and national identity.

Not exactly gripping stuff even in their expanded versions. But not only will the Budget be constructed around them, they are Labour's priorities for the next 10 years, and Government departments have been told to take them into account in "all their planning processes".

Yet, these priorities were made public without fanfare via the website of the Prime Minister's Department.

Clark has always had a dislike of such "vision" statements even though Labour needs them now more than ever.

Her priority has been to get her party out of its post-election trough.

That has seen her Maori MPs get the message to start selling Labour's policies rather than allowing the Maori Party a free run.

It has seen her already embark on a hectic schedule of provincial visits to win back the seats Labour lost last year.

It means getting her colleagues to realise they have to run faster just to stay still.

And it means telling errant state corporations exactly who is in charge.